A panel set up by the British Columbia Securities Commission (BCSC) has found LiquiTrade guilty of running an illegal exchange in Canada.
LiquiTrade’s Latoken crypto exchange was initially accused of violating Canada’s Securities Act in November 2022 when it processed $300 million in daily transactions for its 1.5 million user base.
Investigating the Latoken crypto exchange
Nearly two years into the investigation, a BCSC panel found LiquiTrade violating the Canadian securities legislation:
“LiquiTrade has never been registered in any capacity under the Act, and there is no recognized exchange or clearing agency in British Columbia operated by LiquiTrade or using the name LATOKEN.”
Canadian agency cites multiple violations
The BCSC panel found that LiquiTrade enabled users to trade contractual rights of underlying crypto assets considered derivatives investments.
As a result, LiquiTrade was required to be registered under the Securities Act before it could legally facilitate contract trading in Canada, specifically British Columbia. The statement added:
“The panel also found that LiquiTrade was operating as an exchange. But it was not authorized to do so by the BCSC, as required by the Act.”
As of March 2024, Canada has banned four crypto exchanges, including Catalyx, KuCoin, Poloniex and xt.com exchange. On the other hand, 15 crypto trading platforms are authorized to operate in the region, which includes Bitbuy, Coinbase and Fidelity.
Upcoming sanctions on LiquiTrade could range from monetary penalties to a ban on services.
According to the court filing, the sanctions on LiquiTrade will be finalized by Aug. 14.
Related: Canadian crypto adoption struggles as cash remains king
While Canada cracks down on unregistered crypto exchanges, licensed trading platforms continue to thrive.
Speaking to Cointelegraph, Dean Skurka, CEO of Canadian crypto asset platform WonderFi, said, “We have certainly seen retail come back.”
“It’s not going to happen overnight,” Skurka said, but indicators of public receptiveness to crypto are there. He noted that new signups spiked at WonderFi alongside Bitcoin (BTC) hitting a new all-time high price.
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